It has long been an open secret that GLCs and State Owned Entities in Singapore have deep pockets into public funds. Latest bill will make this formally constitutional to for government owned companies to directly siphon public funds and reserves.
I waited a few days before posting this just to see if anybody else also noticed this landmark amendment in the Singapore Constitution regarding the use of reserves.
On the same day that Nicole Highway collapsed, parliament quietly passed this amendment and it was reported in the Chinese paper like an afterthought.
http://www.zaobao.com/sp/sp025_210404.html
I shall translate because I cannot find an english report anywhere. Those effectively bilingual can check the accuracy of my translation.
21 April 2004
RESERVES CAN BE TRANSFERRED TO STAT BOARDS OR GOVERNEMNT COMPANIES UNDER CIRCUMSTANCES DEEMED AS NOT 'TOUCHING THE RESERVES'
Parliament passed the Constitution of the Republic of Singapore (Amendment) bill which allows the government or statutory boards to transfer the national reserves to statutory boards or government companies under circumstances not deemed as touching the reserves.
Deputy Prime Minister explained during the second reading that the amendement is to allow the government to have make timely reaction to changes in the economic or commercial environment.
For example, the government may urgently need to provide capital to stat boards or government companies in order to grab opportunities in emerging commercial realms. Other than that, some stat boards or government companies may require capital to undertake restructuring, mergers or corporatisation in order to provide better services or better utilization of national resources.
The Deputy Prime Minister and Finance Minister said the government conssulted with President S R Nathan in the process of drawing up the bill and got his consent.
There is no mention of the limit of reserves the government of stat boards can transer around and the amendment is so broad that anything can be a reason to initiate a transfer. If a stat board wants to renovate the toilet to provide better services, it can do so.
If HDB's overseas construction projects runs into troubles, the reserves can be transferred to shore up any losses there under the guise of taking emerging commercial opportunities.
Under the amendment, this is not considered 'touching the reserves'.
We all remember what Lee Kuan Yew said, "SM LEE Kuan Yew yesterday warned that raiding the country's reserves in order to subsidise health-care costs for the elderly would be to motgage the future and if that is done, future generations of Singaporeans would pay for it. His warning in Parliament came as it was debating the Constitutional Amendment Bill. During the debate on the Bill, Bukit Timah GRC MP WANG Kai Yuen had proposed that part of the net investment income from Singapore's reserves be set aside to defray the medical costs of the elderly."
This is the very same Constitutional Bill that he opposed amendment to and now, not only are the elderly still left to fend for themselves, the reserves doors are thrown wide open with the full support of the gatekeeper!
And not a word anywhere about this momentous change will affect the financial health of Singapore. Without any clear limit to act as a stop so that not too many hands go into the jar, I can only assume the money can now walk out to the arms any stat boards and government companies(those exemplary bunch organisations fill with maggots that just grow fat and useless on unjustified high pay) at the whim of fancy of whoever runs these organisations.
Sources and Relevant Links:
Sammyboy's Alfresco Coffee Shop Forum Singapore Reserves cracked wide open 22/04/2004
Singapore Review Singapore Reserves cracked wide open
Parliament Full amendment in parliament
Temasek Holding OFFERING OF S$792,000,000 ZERO COUPON GUARANTEED EXCHANGEABLE NOTES DUE 2009 6 April 2004
Temasek Holding TEMASEK HOLDINGS' OFFERING OF SINGTEL SHARES AND EXCHANGEABLE NOTES 7 January 2004
Singapore-Windows
Temasek Holdings opens up as it eyes regional markets AFP, 22 February 2004
"Ho revealed plans to borrow for the first time in the financial markets, a move that would require Temasek to open its books to an external ratings agency to get a credit rating."
